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Analysts Speculate Xbox 360 Price Drop Still "A Ways Off"

| 31 Oct 2006 14:37

An article in today's Seattle Post-Intelligencer indicates from numerous sources that Microsoft is not likely to drop the price on the Xbox 360 any time soon.

The article, which does not include a clear statement by Microsoft on precisely when a price drop can be expected, notes that, while the Xbox system dropped its price within its first six months, the next-gen 360 system has the advantage of a yearlong headstart and thus the luxury of waiting to see how the Playstation 3 competes. A spokesperson for Microsoft went on record only to repeat the company's firm position that it has, "no plans to adjust the price of the Xbox 360 this year."

Microsoft's Entertainment and Devices division has been making strides toward reaching CFO Chris Liddell's goal of a profitable games segment by FY '08, including the reduction of first quarter losses for the division from $173 million to $96 million. A hasty price reduction with the Xbox driving toward the goal of profitability doesn't seem likely.

They'll hold off dropping the price as long as they possibly can," said Matt Rosoff, analyst at independent research firm Directions on Microsoft. Even at its current price point, the Xbox 360 will cost significantly less than the PS3 when that system launches in two week. A wait and see strategy seems the most likely.

Source: Seattle Post-Intelligencer

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